This is why Apple locks in supplier prices years in advance.

voxic11 11 hours ago | parent | next [-]

Computer hardware prices tend to go down over time so in general this is a pretty bad strategy. Of course in rare times like these it can pay off.

	▲	sltkr 8 hours ago \| parent [-]
		Presumably this is calculated into the contract. If the price is expected to fall over time, then the negotiated price is below market at the beginning and above market at the end. From the suppliers view, they take a loss in the early years that they recover later. Apple probably pays a premium to shift this risk to the supplier. Besides that they don't take a loss just because prices tend to fall. They only lose if market prices fall more steeply than expected.

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mattstir 8 hours ago | parent | prev | next [-]

Apple is also an absolutely enormous company. Even if Valve wanted to lock in prices, they're simply too small for RAM manufacturers to notice on their radar, unfortunately.

	▲	kridsdale3 3 hours ago \| parent [-]
		Apple has been doing this since before they were an enormous company. When the iPod Nano was in the works, they bought like 3 years supply outright, to block their competitors. Pre-iPhone and during the mechanical-disk iPod era, they were a very small and vulnerable entity.

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Aperocky 12 hours ago | parent | prev [-]

That would only works until it doesn't. The suppliers got supplier too and those in turn have their own supplier. I don't know about any specific contract but I bet there's a force majeure or price excluding input cost somewhere.

	▲	dodobirdlord 9 hours ago \| parent [-]
		Places like Apple run their supply chains to ground. Literally in some cases, as they track sourcing of component materials back to the mines they are dug out of.